PRINCIPLES OF CORPORATE FINANCE
- Overview
- Assessment methods
- Learning objectives
- Contents
- Delivery method
- Teaching methods
- Contacts/Info
There are no explicit prerequisites. However, a good understanding of basic principles of Corporate Finance, Accounting and Financial Statements and Financial Mathematics is recommended.
Final written test, which lasts an hour and a half, divided as following:
• theoretical questions to test the knowledge of definitions and basic principles of Corporate Finance
• exercises to verify the application of financial instruments for projects and firms’ valuations;
• multiple-choice questions (max. 6 points), to test reasoning ability.
For the purpose of passing the exam is necessary to achieve a score of at least 18 points over 30. If the student got the maximum score (30 over 30 points) he/she will be awarded with a final score of 30 cum laude in case of a particularly deserving written exam.
Mid-term exams are not scheduled.
The course covers a selection of the major advanced topics of corporate finance, focusing on some of the “pillars” of Corporate Finance such us the investment policy and financing decisions.
We will examine the variables to estimate the value of firms.
Learning Outcomes
At the end of the course the student will be able to know and understand the main economic and financial variables used to estimate the value of a company.
Results of estimations should be analyzed by the student in order to make a judgment related to the acceptability or otherwise of an investment or financing decision.
Basics and advanced topics of capital budgeting (capital budgeting’s criteria, the estimation of cash flows, sensitivity analysis, break-even point analysis, real options and decision trees). Extended NPV and the valuation of real options. The firm’s capital structure (the propositions of Modigliani-Miller, the weighted average cost of capital).
The course will be delivered over a total of 40 hours of frontal teaching, of which about 15% in the form of exercises (within the total number of hours). There will be no other forms of supplementary and integrative teaching.
For all students: Brealey R.A., Myers S.C., Allen F. and Sandri S., “Principles of Corporate Finance” [it], McGraw-Hill, Milan, 2020, 8th edition.
Required parts will be indicated in class and reported within the syllabus/timetable on e-learning platform.
Chapters to be studied for the exam: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 14, 17, 18 ,19.
As supplementary reading chapters: 15, 16, 22.
Other materials (slides of the lectures, tutorials and study materials) will be made available online on the e-learning platform.
No other teaching materials (handouts, summaries, etc..) are authorized by the teacher.
Alternative text-book:
Hiller, Ross, Westerfield, Jaffe, Jordan, «Corporate Finance», III ed. McGraw-Hill 2018
Office Hours
By appointment (in presence): Room #20, first floor, Department of Economics, Via Monte Generoso, 71 – Varese
By appointment (remotely) contacting the teacher by email to schedule an meeting via Microsoft Teams.
Students can be received at the end of each lesson upon previous agreement.